When the Legislative Session ends, the KCC government affairs team continues to monitor activity during the summer and fall months. The Legislature and regulatory agencies use the interim to gear up for next year’s initiatives. Here’s a brief update on some of the issues on the horizon:
The KCC, along with the Kansas Grain and Feed Association (KGFA), has been in talks with the Kansas Department of Revenue’s Property Valuation Division (PVD) for several years in regard to recent spikes in grain elevator valuations. While the PVD has been responsive to some of the industry’s concerns as seen in changes made to their 2018 Grain Elevator Appraisal Guide, there is still more work to be done.
The KCC and KGFA will continue to engage the PVD in productive dialogue about further changes to future editions of their guide. In the meantime, a number of business organizations and interested parties are working together on introducing a comprehensive property tax reform bill next legislative session. The specifics and language are expected to be finalized late this year, but here are some of the components being discussed:
The KCC will engage in stakeholder meetings throughout the fall and winter as a proponent of a mega property tax reform bill next year.
Underground Storage Tanks
The Kansas Department of Health and Environment (KDHE) is proposing a number of issues dealing with underground storage tanks that may be part of a comprehensive bill or several smaller bills next session.
One of several redevelopment funds is set to expire in July 2020. This fund provides incentives to underground storage tank owners for upgrading to double wall systems, as required by the 2005 Federal Energy Act. The bill would extend the sunset of the fund to 2030 as well as increase the amount reimbursed to offset the costs of the federal mandate and increase compliance.
The KCC is expecting KDHE to schedule a stakeholder meeting in the coming weeks and will continue to monitor this and other storage tank legislative initiatives.
Air Quality Fund
The KDHE is proposing an increase on fees for their Air Quality Fee Fund, which is expected to deplete by the end of next year due to the reduction in air emissions and corresponding revenue. A similar effort was tried and failed several years ago. The agency intends to raise $4.5 million annually and pursue these changes this year, for an effective date of January or February of 2020:
The deputy secretary of the Kansas Department of Transportation (KDOT) presented to the Legislative Budget Committee on August 13 the progress made toward completing the T-Works transportation program. This year, the Legislature approved roughly $200 million in additional state general funds to be used in fiscal years 2019 and 2020. KDOT’s allocation plans include the following:
Supreme Court Rulings
Noneconomic Damages: The Kansas Supreme Court ruled on June 14 that the state’s cap on noneconomic damages in personal injury cases is unconstitutional. The Court’s opinion found that limiting damages paid for pain and suffering removes the rights of the plaintiff of having a jury determine compensation owed based on their injuries rather than state law.
The Hilburn v. Enerpipe Ltd. case was filed in 2010 and, and at that time, the state’s cap was $250,000. Since then, the Legislature has raised it to $325,000 and was scheduled to increase to $350,000 in 2022. This ruling will essentially remove the cap entirely and allow for higher personal injury awards that will likely be seen in higher auto liability insurance premiums on all Kansans.
As the dust settles and the full impact of the ruling is being interpreted, some are anticipating that the Legislature will challenge the Court’s ruling during the 2020 legislative session. The KCC is part of a business coalition that will be meeting on August 26 to discuss lobbying strategies.
It took three separate meetings for the Legislative Coordinating Council (LCC) to consider and approve a consultant to study Kansas’ high utility rates, which the Legislature approved this year. The interesting caveat is that the statute requires at least one minority party vote in selecting the contracts. During the first two meetings, the LCC voted on several different combinations of vendors for different phases of the project but all failed on party lines.
The three bidders considered were London Economics International at $309,000; Energy and Environmental Economics at $260,000; and Energy Ventures Analysis at $1.55 million. On July 29, the panel chose London Economics for phase one of the study and will rebid phase two, delaying the execution date to July 1, 2020.
School Finance: Rather early in the session, the Legislature approved an education finance bill that appropriates roughly $90 million per year in additional state funding toward K-12 schools. The measure is in response to the Kansas Supreme Court’s last opinion in Gannon v. Kansas, which ordered the Legislature to account for inflationary increases in the Base State Aid Per Pupil. The bill also includes student outcome accountability measures for schools and targeted programs for at-risk students.
The plan was backed by the Governor and largely supported in the Senate. It was a tougher sell in the House, however, who wanted to see a less expensive K-12 proposal move forward.
The Kansas Supreme Court ruled on June 14 that the Legislature did indeed meet its constitutional requirement to adequately fund schools with this bill. The Court will retain jurisdiction over the lawsuit, however, to ensure that the state follows through. It seems that for now at least, this ends a decade-long legal battle over school finance in Kansas.
The Legislative Coordinating Council (LCC) – a seven-person, joint House and Senate leadership panel – met on July 1 to review and approve interim committees and topics to be studied prior to the 2020 legislative session.
One subject in particular will receive heightened attention this fall: Medicaid expansion. A Senate-only Health interim committee will meet to establish a Senate position on Medicaid expansion. As previously reported, the House passed their expansion bill earlier this year, which will be a starting point for consideration. Following the Senate committee meetings, a joint House and Senate interim panel will meet in an effort to find some common ground before January.
The KCC will also be monitoring and testifying during a Special Committee on Financial Institutions and Insurance, as they consider privilege fees imposed on credit unions.
The following are some of the other special joint interim committees and topics approved:
Participants and leaders pose for a photo by the Munchie Mart Cooperative as part of the Youth Leadership Camp held at Rock Springs 4-H Center. Pictured from left are: Jamie Boggs, KCC Program Coordinator; Janna Klassen, Montezuma, KS; Taylor Axtell, Montezuma, KS; Isaac Jirak, Udall, KS; Rebekah Harmon, Otis, KS; Lane Thompson, McPherson, KS; Ruby Howell, Preston, KS; Brian Briggeman, Arthur Capper Cooperative Center Director; Ali Paz, Hanston, KS; Brandi Miller, KCC president and CEO; Ashley McKenny, MKC Intern.
While summer provides a welcome break in the school routine for many, it also grants opportunities for real world learning experiences like those taught through the KCC Youth Leadership Camp. This pilot program was held for seven rural Kansas high schoolers at Rock Springs 4-H Center July 8-10, 2019.
“At this camp, the students set up a functioning cooperative business, in the form of a snack cooperative that they named Munchie Mart,” said Brandi Miller, president and CEO of the Kansas Cooperative Council (KCC). “The students created articles of incorporation and by-laws, maintained the business, and decided how to distribute patronage back to the members as well as how to share profits from non-member business.”
The camp was made possible through a cooperative education grant from the CHS Foundation as well as support from KCC sponsors and Kansas cooperatives. KCC partnered with Arthur Capper Cooperative Center Director Brian Briggeman to develop and deliver the training.
Among the camp highlights were opportunities to meet new people and make friends. Camper Ruby Howell, Pratt, Kansas, said “I didn’t know what a co-op was when I came to this camp, and so a thing I learned was member value. It is the most important thing, because a co-op is serving its members.”
Philanthropy was also a component of the camp as it illustrated the cooperative principle of Concern for Community. This group of students shared the profits with the Rock Springs 4-H Center as well as donated all remaining snacks to Kansas State’s Food Pantry called Cat’s Cupboard, which helps fight food insecurity among college students.
“Along with setting up the business, the students enjoyed many camping activities including an interactive team challenge course,” Miller said.
They also participated in a formal dining experience with etiquette training provided by Kansas State University’s Anne DeLuca.
In addition to engaging young people, Miller said the camp was developed to educate high school students about cooperatives in an engaging way because sometimes those impacts are overlooked by young people in rural America.
“I appreciate the work in developing this program. It will be used to educate high school leaders on the importance of the co-op system,” said Jerald Kemmerer, CEO and general manager of Pride Ag Resources, Dodge City, Kansas. He added, “These campers can now share this information back in the local communities and lay the foundation for new cooperative leaders in the future.”
The campers agreed that they left with a new appreciation for the roles of their local co-ops. Camper Isaac Jirak, Udall, Kansas, summed it up by saying, “I learned the importance of co-ops in our world and what they do for our community.”
Thirty-five college interns from across the Midwest participate in a cooperative training program.
Topeka, KS – By 2030, the baby boomer generation will all be retirement eligible. This will open opportunities in agriculture for the next generations to move into leadership positions. In preparation, the Kansas Cooperative Council (KCC), is supporting younger generations and introducing them to the possibilities within the cooperative network.
On May 20, 2019, thirty-five college interns traveled from across Kansas, Nebraska, Oklahoma and Illinois to learn about the cooperative business structure, patronage and how to get the most from their internship. KCC partnered with Arthur Capper Cooperative Center Director, Brian Briggeman, to deliver the training. In addition, Mitch Williams, President and CEO of KFSA Insurance Agency, shared leadership insights and how to make the most of an internship experience.
Allayna Hanson, Summer Intern with MKC, enjoyed the program and said she was “excited to take what I learned here and apply it to my internship this summer. I am really excited about working with farmers and understanding why co-ops are important to them.”
The interns will be participating in programs at Kansas based cooperatives and will spend their summer learning about agronomy, sales, communications and even information technology. Many people don’t realize the numerous career opportunities that are available in cooperative businesses.
“We value our intern program here at Jackson Farmers. Through this program we strive to provide hands on experience to the young people who become part of our team. In return we get the benefit of their fresh ideas, and hopefully, down the road, a new permanent member of our team,” says Doug Biswell, President and CEO of Jackson Farmers Inc., Holton, KS.
The students value the experience as well. It gives them an opportunity to explore different career options and see cooperative career paths up close. “I am really looking forward to gaining management skills through this opportunity,” says Tom Harmon, Summer Intern with Skyland Grain LLC.
Watch your mailbox, these Save the Date postcards will be mailed out to each of our members!
For some, a co-op might mean the tallest building in town, envisioning the towering grain elevators dotting the rural Kansas landscape. It might mean the local telephone company, the folks that keep the lights on, the local filling station, or the local credit union, bringing services to communities that otherwise may have limited options. But to me, a co-op is all these things and more.
When I see a co-op, no matter the type, I think of a business that provides jobs to their local community, keeps profits in their local economy, pays local taxes and supports their community. In Kansas, co-ops operate in every county, serving over 600,000 members. Member-owned, member-controlled co-ops are established because there is a need for service, often in rural areas and working cooperatively is the best way to provide service for the benefit of all members.
Cooperatives have been a vital part of the Kansas economy for over 100 years and while they focus on serving their members locally, their impact can be felt around the world.
October is National Co-op Month, a time to celebrate the contributions of cooperatives to Kansas communities and the commitments they make to their members. The Kansas Cooperative Council is thrilled that the cooperative spirit is alive and well in Kansas. Help us celebrate by visiting your local co-op and thanking them for their commitment to your community.
Guest Editorial from KCC Chairman James Jirak, Valley Coop, Inc.